April has historically been a great month to be invested in the stock market (2024)

FAQs

April has historically been a great month to be invested in the stock market? ›

The average gain for the S&P 500 in April over the last 20 years is 2%. The NYSE Composite, a broader measure of stock market performance, has also moved up in April 80% of the time with an average gain of 2%.

According to Reuters, since 1945, April and December are tied as the best-performing months of the year for stocks, with an average return of 1.6%. (September is notoriously the worst, with an average loss of -0.6%.) During recessions, April's positive performances can be even more pronounced.

KEY TAKEAWAYS. "Sell in May and go away" is a popular adage that suggests investors get out of stock holdings in the summer months and invest again around Halloween. While historical stock performance shows evidence of lower returns during summer months, advisors don't recommend investors pull out of the markets.

Traders work on the floor of the New York Stock Exchange on April 1, 2024. The three major indexes were on pace to post sizable declines on Monday as the final trading hour commenced. The S&P 500 and Nasdaq Composite dropped 1.2% and 1.7%, respectively, shortly before 3 p.m. ET.

Major stock indexes fell in April, ending a five-month run of gains. for the S&P 500. The S&P 500 dropped 4.2% at the end of April from a month earlier. The Dow Jones Industrial Average shed 5.0% during the month and the small-cap Russell 2000 fared worse, with a 7.1% decline.

The S&P 500 has hit 20 intraday highs in 2024. As stocks climb higher many stock valuations may be stretched beyond their intrinsic value. But it's still possible to find great investment opportunities as the stock market hits new all-time highs.

The September Effect refers to the historically weak stock market returns observed during the month of September. In fact, September has been the worst performing month, on average, going back nearly a century.

Historically, Mondays have often been considered a good day to buy stocks, primarily due to the 'Weekend Effect' or 'Monday Effect'. This theory suggests that stock prices tend to drop on Mondays due to negative news released over the weekend.

Based on the stock market's historic performance, there's never necessarily a bad time to buy -- as long as you keep a long-term outlook. The market can be volatile in the short term (even in strong economic times), but it has a perfect track record of seeing positive returns over many years.

What is the 10 am rule in stock trading? ›

Some traders follow something called the "10 a.m. rule." The stock market opens for trading at 9:30 a.m., and the time between 9:30 a.m. and 10 a.m. often has significant trading volume. Traders that follow the 10 a.m. rule think a stock's price trajectory is relatively set for the day by the end of that half-hour.

Instead of selling out, a better strategy would be to rebalance your portfolio to correspond with market conditions and outlook, making sure to maintain your overall desired mix of assets. Investing in equities should be a long-term endeavor, and the long-term favors those who stay invested.

Basic Info. S&P 500 Monthly Total Return is at -4.08%, compared to 3.22% last month and 1.56% last year. This is lower than the long term average of 0.70%. The S&P 500 Monthly Total Return is the investment return received each month, including dividends, when holding the S&P 500 index.

As a whole, analysts are optimistic about the outlook for stock prices in 2024. The consensus analyst price target for the S&P 500 is 5,090, suggesting roughly 8.5% upside from current levels.

Earnings Rebound

Analysts are projecting S&P 500 earnings growth will accelerate to 9.7% in the second quarter and S&P 500 companies will report an impressive 10.8% earnings growth for the full calendar year in 2024.

The Big Money bulls forecast that the Dow Jones Industrial Average will end 2024 at about 41,231, 9% higher than current levels. Market optimists had a mean forecast of 5461 for the S&P 500 and 17,143 for the Nasdaq Composite —up 9% and 10%, respectively, from where the indexes were trading on May 1.

And that's par for the course for the month of April. Going back to 1928, the S&P 500 has averaged a 1.4% gain during the fourth month of the year, more than double the average rise of 0.6% for all other months of the year.

It can be nerve-wracking to watch your portfolio consistently drop during bear market periods. After all, nobody likes losing money; that goes against the whole purpose of investing. However, pulling your money out of the stock market during down periods can often do more harm than good in the long term.

Going back to 1928, the S&P 500's yearly performance from November to April has consistently been the stronger six-month cycle of the year. Dow Jones Market Data says the S&P 500 averages a gain of 5.2% during the November to April periods. This is more than double the 2.1% rise in the May to October cycle.

The market sees a greater than 80% chance of at least five rate cuts from current levels by the end of 2024. Investor optimism about the economic outlook has improved dramatically from a year ago, but there's still a risk that Fed policy tightening could tip the economy into a recession in 2024.